The MSCI Europe SMID index of European small to mid-cap firms (.MIEU000D0PEU) is trading near 2008 lows versus the wider market in terms of valuations, including both price/earnings and price-to-book ratios.
The bank's small cap basket is invested across sectors, or 'sector neutral', to make it "less prone to the ups and downs of cyclical acceleration and deceleration."
But M&A remains a supportive theme, said Amundi's Matti, as big players seeking external growth can look to the small cap sector for niche expertise to add to their portfolios.
"When people are trying to find alpha to add to their portfolio, small caps tend to be the place to look at," said Matti.
"Ultimately, they (small caps) are a rich hunting ground for long-term investors."
Persons:
Dash, Emmanuel Cau, Amundi, Cristina Matti, Amundi's Matti, Matti, Graham Secker, Morgan Stanley, ”, Bernie Ahkong, Morgan Stanley's Secker, Thomas McGarrity, Lucy Raitano, Susan Fenton
Organizations:
Barclays, Energy, Reuters Graphics, O’Connor, Alpha, UBS Asset Management, Data, RBC Wealth Management, Thomson
Locations:
Europe, Amundi